1st Oct 2015 15:01
LONDON (Alliance News) - Punch Taverns PLC and Conviviality Retail PLC Thursday said Punch shareholders have approved the proposed sale of its 50% stake in Matthew Clark (Holdings) Ltd to Conviviality.
Conviviality struck a deal to fully acquire drinks supplier Matthew Clark (Holdings) Ltd for GBP200 million, of which it will pay just over half to fellow-listed Punch Taverns.
The Matthew Clark business is a 50/50 joint venture between Punch Taverns and Hertford Cellars Ltd, a subsidiary of Accolade Wines Ltd. As part of the same transaction, Hertford Cellars sold its 50% shareholding in Matthew Clark to Conviviality Brands.
Conviviality agreed to pay GBP100.7 million to Punch for its 50% stake in Matthew Clark, with the remaining balance being paid for the other 50% stake held by Hertford Cellars.
On Thursday, Punch Tavern shareholders approved the deal at a general meeting.
Conviviality is expecting the acquisition to be "earnings enhancing" within the first year of ownership.
Punch Taverns said it will make around GBP98.7 million in net cash proceeds after costs and expenses, which will improve the company's "financial flexibility to pursue its strategic objectives", it said.
Under the deal, Punch Taverns will enter into a 10 year non-exclusive drinks supply contract with Matthew Clark Wholesale Ltd. Under this supply agreement, Matthew Clark Wholesale will supply selected wines and spirits drinks products to Punch Taverns at agreed pricing levels.
Matthew Clark is a wholesaler selling a wide range of alcholic and non-alcholic beverages whilst Conviviality mainly trades under the 'Bargain Booze' retail store brand. Punch Taverns runs about 3,500 pubs across the UK and was formed in 1997.
Conviviality shares were trading flat at 186.0 pence per share on Thursday whilst Punch shares were up 0.4% to 119.50 pence.
By Joshua Warner; [email protected]; @JoshAlliance
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